Loss of grant-in-lieu funding leaves Sask. municipalities short

Budget changes catch Sask. cities off guard Saskatchewan municipalities are lamenting the loss of $36 million in “grants in lieu” payments, as Taylor Rattray reports

Saskatchewan municipalities are now on the hook for $36 million, after the provincial government made changes in last week’s budget to “grants in lieu” payments for SaskEnergy and SaskPower.

The grants compensated municipalities for revenue they would have been able to generate if they had developed their own electrical and natural gas distribution systems. Because of this, Regina and Saskatoon have shortfalls of about $11 million each.

“We have a real problem on our hands,” said Saskatoon Mayor Charlie Clark, after Saskatoon City Council held an emergency council meeting Sunday to discuss ways to deal with the shortfall. It is exploring legal measures in response to the cut.

It’s a bill Regina Mayor Michael Fougere says has caught the city off guard.

“There was no consultation,” said Fougere. “The government has (said) many times before, 'Everything’s on the table.’ When you say, 'Everything's on the table,' that is not consultation.”

To fill the gap, the province said cities have millions of dollars in reserves that could be accessed. Both Fougere and Clark said that isn’t sustainable.

“We have been very clear with the public in general and with (the Saskatchewan Association of Rural Municipalities) and (the Saskatchewan Urban Municipalities Association) that this is going to be a tough budget and absolutely everything is on the table,” said Government Relations Minister Donna Harpauer.

“The premier, as well as myself, made an address to the SUMA convention and the SARM convention. In both of those conventions, we mentioned grants-in-lieu.”

Unlike other levels of government, municipalities need to balance their budgets each year. Councils will need to set a mill rate by April to get tax notices to property owners by the end of May.

SUMA CEO Laurent Mougeot says most municipalities have already completed their 2017-18 budgets, so they will have to reopen everything.

“There (are) not a lot of options at the municipal level,” said Mougeot. “It's either property tax increase or user fee increase.”

Yorkton Mayor Bob Maloney says that city will be hit particularly hard by the cut, as it will lose the equivalent of 58 per cent in revenue sharing.

“We've really been seem to be singled out. To me, it's all about fairness. This isn't fair,” said Maloney.

The City of Regina is consulting with other affected municipalities to try and come up with solutions, and municipal leaders across Saskatchewan plan to meet with the province later this week. As for the Queen City, council will finalize its plans on April 10.